THE MARKET IS THE ANSWER

September 19, 2007

Sen. Hillary Clinton's new health reform proposal promises more choice, lower costs and no new government bureaucracies. But the rhetoric doesn't match the reality, says Grace-Marie Turner, president of the Galen Institute.

Under the Clinton's plan:

Everyone would be required to have health insurance and businesses would be required to pay a significant share of the costs.

Small businesses would get a tax credit to help pay for worker coverage, but only if they offer government-defined coverage and pay a government-determined share of the premiums.

Medicaid and the State Children's Health Insurance Program would be expanded and a new Medicare-like program would be created.

To her credit, Sen. Clinton includes an idea long-promoted by conservatives to offer refundable tax credits to help those at the lower end of the income scale afford coverage, says Turner. But she misses an opportunity to allow health insurance to become portable by freeing up the tax subsidy that ties health insurance to the workplace for 175 million Americans.

The United States could be a leader in developing health insurance that is better suited to a mobile and information-savvy 21st century workforce. Allowing greater competition in the health insurance industry would lead to more affordable premiums. Giving consumers a greater incentive to shop for value would put power in the hands of doctors and patients, not government, says Turner. Market-oriented reforms, coupled with assistance for those at the lower end of the economic scale, would be a far better solution.